20000127

Orix assigned

double A minus,

A one+ ratings

RECORDER REPORT

KARACHI: The Pakistan Credit Rating Agency (Pacra) has assigned a long-term rating of double A minus and a short-term rating of A one plus to Orix Leasing Pakistan Limited and Single A one to National Development Leasing Corporation, respectively.

According to the press release of Pacra, the ratings of Orix Leasing represent highest rating in the leasing sector. The assigned ratings denote both a very low expectation of credit risk as well as a very strong capacity to service financial obligations on a timely basis. The ratings are applicable to the senior unsecured creditors of the company.

While assigning the rating, the Pacra has recognised Orix's success in maintaining its outstanding performance and asset quality in comparison with the sector despite an adverse operating environment.

This has been possible because of the well organised management systems as well as effective credit evaluation and marketing. Orix's target segment (small and micro leasing) and business strategy allow it to remain insulated from the risk of client or sectorial concentration.

Orix has gradually expanded its operating lease portfolio and is well positioned to avail of the growth opportunities in this specialised line of leasing.

The company's strategy of diversification by way of investing in foreign ventures which offer promising returns has helped in creating an additional, sustainable source of revenue generation.

The rating assigned to the National Development Leasing denotes a low expectation of credit risk emanating from the company's strong capacity to service its obligations on a timely basis. These ratings are applicable to the senior unsecured creditors of the company the secured terms finance certificate of Rs 500 million issued in November 1999 has been assigned a rating of A plus.

The management's aggressive recovery drive augmented by across-the-board pressure against defaulters initiated by the new government enabled the company to make substantial recoveries from some of its chronic defaulters.

There has also been an improvement in the National Development Leasing's performance indicators. The positive trends in performance and asset quality are expected to continue as long as the management's strategies remain on track.

While the prevailing operating environment may continue to constrain the extent of this improvement, the company is better positioned to benefit from any positive trends in the operating environment by optimally deploying additional funds generated from the TFC issue.